Published: 2021-01-13

Page: 1-12


Department of Accounting, Gombe State University, Gombe, Nigeria.


Department of Accounting, Gombe State University, Gombe, Nigeria.

*Author to whom correspondence should be addressed.


Owing to inconclusive results on the relationship between capital structure and profitability world over, there is need to take into consideration a moderating variable to strengthen the relationship. This study therefore, introduces board independence as moderator to examine its effect on the relationship between capital structure and profitability of listed industrial goods companies in Nigeria for the period 2006-2018. The population of the study comprises of all the twenty one (21) listed industrial goods companies in Nigerian Stock Exchange (NSE) as at December, 2018. Out of which ten (10) companies constitute the sample of the study. The study utilized documented data collected from annual reports and accounts of the sampled companies, data was first analysed by means of descriptive statistics to provide summary statistics for the variables subsequently, correlation analysis was carried out using Pearson correlation technique for the correlation between the dependent and independent variables and OLS regression technique was employed. The results revealed that capital structure proxy by debt to equity ratio has a significant positive impact on profitability while board independence provides negative and significant effect on the relationship between capital structure and profitability of listed industrial goods companies in Nigeria. Based on these findings the study recommends that policy makers as well as the management of industrial goods companies should identify the optimal capital structure as well as complying with the code of corporate governance in ensuring perfect mixture of board independence as some of the companies are not abiding by the 50% mixture between the executive and non-executive directors in the board.

Keywords: Board independence, capital structure, industrial goods, Nigeria and profitability

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